Thread by @ketanmba03

The API Industry
✍️ The backbone of India pharma industry is the bulk drug industry
✍️ India has highest no. of US FDA approved plants (665) outside of the US
✍️ India has 44% of global abbreviated new drug applications (ANDA)
✍️ India needs to proactively boost the API Industry

✍️ The Indian pharma industry is the world's 3rd largest in terms of vol
✍️ India's API industry is ranked the 3rd largest in the world
✍️ India fulfils 20% of global demand for generic medicines in terms of Vol & supplies over 60% of global demand of various vaccines & ARV drugs

✍️ Indian bulk drug industry has grown at CAGR of 8.6% over 2016-2020. It is further expeacted to grow at similar CAGR during 2020-2024
✍️ The import of APIs has risen at a CAGR of 8.3% from 2012-2019
✍️ Bulk drug import reached a value of INR ~249 billion in 2019

@Harrshit1

✍️ Imports from China have been on a steady rise over the yrs (Frm 62% in FY12 to 68% in FY19)
✍️ India imported 169 Bn worth of APIs from China in FY19
✍️ High import dependancy is largely attributed to lack of cost-effective options in domestic API mfging as compared to imports

Contribution to Economy
✍️ Provides Employment to 2.7 Mn Ppl
✍️ Generates $11Bn trade surplus every yr
✍️ Amongst the top 5 sectors contributing to the reduction of trade deficit
✍️ 2 Bn FDI inflows over the last 3 yrs
✍️ Dominated by MSMEs which are primary employment generators

✍️ The Indian generics industry can benefit substiantially from the patent cliff as patents for branded molecules with cumulative global sales of over $251 billion are expected to expire b/w 2018 & 2024, opening new opportunities for the industry
#Bulkdrug
@unseenvalue
#API

✍️ India is expected to export bulk drugs worth 303 Bn in FY20
✍️ India accounts for 17.5% of the world's population & bears 20% of the global diseases burden
✍️ 1 in every 3 pills consumed in the US is produced by an Indian generics manufacturer

@unseenvalue
#Pharmaceutical

✍️ The bulk drug industry is highly fragmented with around 1500 plants that manufacture APIs.
✍️ In FY18, top 14-16 players (including large formulation companies) comprised just 16-17 percent of total market share.
✍️ Current market is largely dependent on China for many APIs

High Imports
✍️ Low cost Imports have a gradual erosion of india's mfging capacity of many APIs
✍️ Dependancy on imports can be reduced if India is able to manufacture the APIs in a cost efficient manner
✍️ China is a single supplier for many of the critical intermediates & APIs

Challanges face by Indian API Industry
✍️ Limited government support in the past
✍️ Inadequate infrastructure
✍️ Environemental clearnace issues
✍️ Price control regime (NLEM/DPCO/NPPA)
✍️ Price volatility due to high import dependancy
✍️ Increased Scrutiny of quality compliance

India and China
✍️ China enjoys cost advantage of around 20%-30% over India
✍️ Chinese API market has now over 2000 APIs molecules
✍️ China has more than 7000 APIs manufacturers with annual production capacity exceeding 2 Mn tonnes
✍️ Indin has around 1500 APIs mfging plants

✍️ China's dominant position in the mkt is a result of infrastructure investment, large-scale mfging capacities, cost effieciency, technical capabilities and supportive govt policies
✍️ China implemented a greater no of reforms to improve its business climate in FY19 than India

Cost Comparison India v China
✍️ RM costs in China are 25%-30% lower than India
✍️ Power cost in China is 20% cheaper than India
✍️ Logistics costs in China are lesser than India
✍️ Borrowing cost in China is lesser than India

@npal20 @_N_U_P_K_Y @DIALWEALTH_IN

✍️ Manpower cost in India is 1.8 times lower than China
✍️ Capacity Utilization rate in China 30%-40% higher than India
✍️ Set-up & production costs in China are 15%-20% lower than in India
✍️ Cost of Chinese bulk drug is 20%-30% lower than in India
#Pharmaceuticals
#API
#China

Boosting API Industry
✍️ Recently GOI approved Bulk drug park & Production linked Incentive Scheme for promotion of domestic mfging of 53 critical APIs
✍️ Ease of doing business
✍️ Incentives and subsidies
✍️ Infrastructure development
✍️ Innovation and technical capabilities